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Tax exemption limit under 80C raised to Rs 1.5 lakh
Salaried class has got something to cheer with Finance Minister Arun Jaitley raising tax exemption limit to Rs 250,000 from Rs 200,000, providing a relief of Rs 5,000.
"I propose not to make any changes in the tax rate. However, with the view to provide relief to small and marginal and senior citizen, I propose to increase the personal income tax exemption limit by Rs 50,000 from Rs 200,000 to Rs 250,000 in case of all individual tax payer who are below the age of 60 years," he said while presenting budget for 2014-15 in the Parliament.
The proposal, according to an estimate, is likely to benefit about two crore tax payers.
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Considering the hike in the basic exemption limit; sops in Section 80 (C); and the revision of interest paid on housing loan; here's the total saving an individual would make in the financial year 2014-15
| Tax Slabs | Tax Saved |
| Rs 2 - 5 lakh | Rs 15,450 |
| Rs 5 - 10 lakh | Rs 25,750 |
| Above Rs 10 lakh | Rs 36,050 |
Tax exemption limit under 80C raised to Rs 1.5 lakh
Similarly, he raised tax exemption limit from Rs 250,000 to Rs 300,000 in the case of senior citizens.
"I do not propose to make any change in the rate of surcharge for either for corporates or individual. The education cess for all tax payers shall continue at 3 per cent," he said.
Thus, tax on income from Rs 250,000 to Rs 500,000 is retained at 10 per cent, up to Rs 10 lakh at 20 per cent and above 10 lakh at 30 per cent.
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Income Tax Rates Post Budget 2014-15| INCOME | TAX RATE | IMPACT | |
| Individual Tax Payers | |||
| Up to Rs 2,50,000 | NIL | Rs 5,000 | |
| Savings | |||
| Rs 2,50,001 to Rs 5,00,000 | 10 per cent | Do | |
| Rs 5,00,001 to Rs 10,00,000 | 20 per cent | Do | |
| Above Rs 10,00,000 | 30 per cent | Do | |
| For Senior Citizens - above 60 years | |||
| Up to Rs 3,00,000 | NIL | Rs 5,000 | |
| Savings | |||
| Rs 3,00,001 to Rs 5,00,000 | 10 per cent | Do | |
| Rs 5,00,001 to Rs 10,00,000 | 20 per cent | Do | |
| Above Rs 10,00,000 | 30 per cent | Do |
Tax exemption limit under 80C raised to Rs 1.5 lakh
Noting that households are main contributors to savings, he said the investment limit under 80 C has been raised to Rs 150,000 from the existing Rs 100,000 to encourage savings.
Investment in Public Provident Fund up to Rs 150,000 would now be exempt from tax. This was earlier pegged at Rs 100,000.
He also raised tax deduction limit on account of interest of housing loan in case of self occupied property to Rs 200,000 from Rs 150,000.
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